Hot Growth Special Report 2006 >



Lufkin Industries (LUFK)

Lufkin Industries is best known for making all those trailers you see on the interstate. But that's not what's making its shareholders smile. They're having a nice ride with Lufkin stock because the Lufkin (Texas) manufacturer also makes oil-field pumps and power-transmission gear. Those two businesses have been burning up the road and sent overall earnings up threefold last year to $45 million on sales of $492 million; the stock has more than doubled in 12 months. Big Mo continued in the first quarter with revenues up 32%, order backlog up 37%, and net income up 105%. Not bad for an outfit that dates back to 1902. But as Lufkin expands capacity to meet soaring demand, one of management's chief concerns is that it doesn't overdo it just in time for the economy to slam on the brakes.

Company Info

2005 Rank


Market Value*
($ Millions)


($ Millions)


Sales Growth
(3-yr. avg. annual)

29.8 %

($ Millions)


Profit Growth
(3-yr. avg. annual)

70.7 %

Return on Inv. Capital (3-yr.)

8.6 %

Share Price
12-Mo. Hi/Lo


Share Price
As of 4/28/06


Return on Equity

18.9 %

P/E Ratio


No. of Employees


Industry Oil & Gas Equipment & Services


Location Lufkin, Tex.
Phone 936 634-2211
*Trailing 12 months
Stock price data as of 4/28/06
DATA: Standard & Poor's Compustat

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Company Snapshot

Lufkin Industries and its subsidiaries engage in the manufacture and sale of oil field pumping units, power transmission products, and highway trailers worldwide. The company operates in three segments: Oil Field, Power Transmission, and Trailer. The Oil Field segment manufactures and services artificial reciprocating rod lift equipment and related products. It also transports and repairs pumping units, as well as refurbishes used pumping units. In addition, this segment designs, manufactures, installs, and services computer control equipment and analytical services for pumping units; and operates an iron foundry to produce castings for new pumping units. The Power Transmission segment designs, manufactures, and services speed increasing and reducing gearboxes for industrial applications. It also manufactures capital spares for customers in conjunction with the production of new gearboxes, as well as producing parts for after-market service. In addition, this segment provides on- and off-site repair and service. The Trailer segment manufactures and services various highway trailers for the freight-hauling market. It offers general-purpose dry-freight vans, flat-bed style trailers, and dumps trailers, as well as provides replacement parts. Lufkin Industries primarily sells its products to oil and gas companies and various industries, as well as to small and medium-size fleet freight-hauling companies through a dealer network. It operates in the U.S., Europe, Canada, and Latin America. The company was founded by Frank Kavanaugh Sr.; J.H. Kurth Sr.; S.W. Henderson Sr.; and Eli Wiener in 1902. Lufkin Industries is based in Lufkin, Tex.

Data provided by Capital IQ
Douglas V. Smith

Douglas V. Smith, 63

Chairman, Chief Executive Officer and President

Total Compensation*

$ 1,034,502

Total Options Value*

$ 13,922,032

* Fiscal Year 2005

Executive Bio

Douglas Smith is president, CEO, and chairman of the board of Lufkin Industries. Smith was elected president and CEO of Lufkin in January, 1993, and chairman in May, 1995. He was also elected director in January, 1993.

Management Team

Key Executives

Douglas V. Smith; John F. Glick; Scott H. Semlinger; Larry M. Hoes; P. G. Perez; Robert D. Leslie

Board Directors

Suzanne V. Baer; James T. Jongebloed; John F. Anderson; Thomas E. Wiener; H. J. Trout; Simon W. Henderson; John H. Lollar; O' Bob H. Neal; Douglas V. Smith

Executive Data provided by Capital IQ